The Government is to consult on giving equal treatment to qualifying non-UK pension schemes and UK registered pension schemes.
In proposals announced in the Budget this week, the Government says it wants to give equivalent treatment to Qnups and UK schemes “to remove opportunities to avoid inheritance tax”.
Propositions expert Colin Jelley says there is currently no annual allowance for Qnups, unlike UK schemes, which are subject to an allowance of £50,000 in the current financial year and £40,000 in the next financial year.
Jelley says: “This makes Qnups more attractive from an inheritance tax perspective. It is not yet clear how the Government plans to equalise the treatment of schemes, but it may be through an annual allowance on Qnups.
“It is an oddity that Qnups have no cash contribution limits so it makes sense for the Government to seek to create a level playing field.”
Syndaxi Chartered Financial Planners managing director Robert Reid says: “The Government is trying to shut down people going into offshore schemes by making the impact on IHT neutral.
“The major pension reforms announced in the Budget which make pensions more flexible and accessible will also contribute to making offshore schemes less attractive in comparison.”